From Tax Year 2026-27, taxpayers who previously knew Forms 15G and 15H need to learn a new form number: Form 121. The Income Tax Department explains that Form 121 under the Income-tax Rules, 2026 replaces the earlier Form 15G and Form 15H framework for tax years beginning on or after 1 April 2026. Its purpose remains familiar: an eligible recipient declares that tax on estimated total income is nil so that TDS is not deducted on specified receipts.
The change is easy to misunderstand because older assessment-year material can still refer to Forms 15G and 15H. The key is to match the form to the tax year. The Department's Income Tax Forms transition FAQ states that Form 15G and Form 15H were governed by section 197A of the Income-tax Act, 1961, while the corresponding provision under the Income-tax Act, 2025 is section 393(6). For Tax Year 2026-27 onward, the declaration is furnished in Form 121.
What Form 121 actually does
Form 121 is a self-declaration for receipt of specified income without deduction of tax. It is not a refund form and it does not itself create a tax exemption. The declaration tells the payer that the recipient satisfies the statutory conditions for non-deduction because tax on the recipient's estimated total income for the tax year will be nil.
The Department's detailed Form 121 FAQ describes the form as a preventive compliance tool intended to avoid unnecessary TDS and later refund claims where the taxpayer's tax liability is nil.
Form 121 versus old Forms 15G and 15H
- Old framework: Forms 15G and 15H operated under section 197A of the Income-tax Act, 1961 and Rule 29C of the Income-tax Rules, 1962.
- New framework: Form 121 operates under sections 393(6) and 393(7) of the Income-tax Act, 2025 and Rule 211 of the Income-tax Rules, 2026.
- Tax-year rule: for a tax year beginning on or after 1 April 2026, the Department says the declaration must be furnished in Form 121.
- Unified form: Form 121 brings the earlier 15G and 15H declaration routes into one prescribed form rather than retaining two separate form numbers.
Who can use Form 121?
The Department's current guidance says the eligibility criteria continue in substance under the new Act. Resident individuals below 60 who would previously have used Form 15G, resident senior citizens who would previously have used Form 15H, and other specified eligible non-corporate persons can fall within the declaration framework, subject to the prescribed conditions. Companies and firms are not eligible, and non-residents are not eligible.
The central condition is not simply that TDS would otherwise be deducted. The declaration is based on the taxpayer's estimated total income and the resulting tax liability. The official Form 121 guidance PDF explains the eligibility framework and the transition from the earlier forms.
Why nil tax liability matters
A common mistake is to assume that anyone whose bank interest is below a TDS threshold can automatically submit the declaration. The form is tied to the statutory eligibility conditions, including the nil-tax position on estimated total income. A taxpayer should therefore estimate income from all relevant sources before signing the declaration rather than looking only at the deposit or payer to whom the form is being given.
For example, suppose a resident individual has interest from three banks, dividend income and freelance receipts. Even if the interest at one bank appears modest, eligibility should be tested using the taxpayer's estimated total-income position for the tax year. The declaration should not be used merely as a device to prevent TDS when tax is actually expected to be payable.
When should Form 121 be given?
The Department's Form 121 guidance states that the declaration is furnished to the payer before the relevant income is credited or paid, as applicable. In practice, taxpayers should not wait until after TDS has already been deducted and expect the declaration automatically to reverse that deduction.
Because income estimates can change during the year, the taxpayer should also revisit the declaration if later income materially changes the nil-tax conclusion. The declaration is based on an estimate, but it must be a supportable estimate when furnished.
Form 121 is different from a lower or nil withholding certificate
Form 121 should not be confused with an Assessing Officer's lower or nil withholding certificate. The Income Tax Department's transition FAQ separately explains that the lower or nil certificate route under the new Act is contained in section 395(1), with an application to the Assessing Officer. Form 121, by contrast, is a taxpayer self-declaration available only where its statutory conditions are met.
This distinction matters when a recipient expects tax to be payable but believes the normal withholding rate is too high compared with the final liability. Such a case may require examination of the lower-deduction certificate route rather than an ineligible Form 121 declaration.
Practical checklist before submitting Form 121
- Identify the correct tax year: use the new Form 121 framework for Tax Year 2026-27 onward; do not copy an old 15G or 15H merely because it was used in the previous year.
- Confirm residential and entity eligibility: non-residents, companies and firms should not assume this self-declaration route is available.
- Estimate total income: include relevant income across payers and sources, not just the receipt on which one bank or deductor may withhold tax.
- Compute expected tax: verify that the nil-tax condition required for the declaration is genuinely satisfied.
- Give the declaration before deduction: submit it to the relevant payer before the income is credited or paid, as applicable.
- Keep evidence: retain the submitted declaration and the income/tax working used to support eligibility.
- Reassess if circumstances change: if later income changes the estimated tax position, do not continue relying mechanically on an earlier estimate.
Example: senior citizen with bank interest
Assume a resident individual aged 67 expects pension and bank interest during Tax Year 2026-27. Under the earlier framework, the individual would have looked to Form 15H. Under the new framework, the relevant declaration is Form 121. The taxpayer should estimate total income and tax for the year, taking the applicable tax rules into account. If the statutory nil-tax condition is satisfied, Form 121 can be considered for specified receipts; age alone does not replace the income-and-tax test.
Example: taxpayer who expects tax to be payable
Assume another resident taxpayer expects substantial professional income in addition to bank interest and calculates that tax will be payable for the year. Preventing bank TDS through Form 121 would not be justified merely because the taxpayer prefers to pay tax later. The self-declaration is built around nil estimated tax liability, not cash-flow convenience.
Key takeaway
For Tax Year 2026-27 onward, Form 121 is the form to understand in place of the old Form 15G and Form 15H framework. It is a self-declaration for eligible taxpayers whose estimated total-income tax liability is nil, not a universal request to stop TDS. Before submitting it, confirm the tax year, eligibility, total-income estimate and nil-tax position, and give the declaration to the payer before the relevant deduction point.
